The bipartisan infrastructure bill released late Sunday would speed up the expiration date of a tax credit designed to help businesses retain employees during the coronavirus pandemic.
A provision in the $1.2 trillion legislative package would largely end the employee retention credit on Sept. 30, instead of the current Dec. 31 deadline. Certain businesses that were created during the pandemic would still be able to use the tax break for wages paid through the end of the year.
The Joint Committee on Taxation estimated that the new end date for the employee retention credit would raise $8.2 billion. The provision is one of several in the bill that aims to offset the cost of spending in areas such as roads, transit, water infrastructure and broadband.
The employee retention credit is a payroll tax credit meant to prevent businesses from laying off workers during the pandemic, when employers slashed millions of jobs last spring. The credit was initially established by the $2.2 trillion CARES Act in March 2020, and was later expanded through subsequent coronavirus relief laws. The $1.9 trillion measure President BidenJoe BidenGOP report on COVID-19 origins homes in on lab leak theory READ: The .2 trillion Infrastructure Investment and Jobs Act Senators introduce bipartisan infrastructure bill in rare Sunday session MORE signed in March extended the tax credit from June 30 to Dec. 31.
Bloomberg News reported Monday that some larger companies such as Spirit Airlines and Best Buy have used the tax credit, but that overall relatively few companies have used it.
Adam Markowitz, a Florida-based tax preparer, questioned the timing of the proposal to end the credit early, given the spread of the delta variant of COVID-19.
“This seems like a really strange time to go ahead and take something like this away without replacing it with anything,” he told The Hill on Monday.
Senators are planning to pass the bill before they leave Washington for their August recess. The House has already started its recess and is not scheduled to return to Washington until next month.
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